June 6, 2013

Arizona Commerce Authority Update

The Arizona Commerce Authority is charged with recruiting, creating and growing businesses in our state. Greg Linaman, who is the Chief Operating Officer of the authority, will talk the organization’s mission and recent successes.

Ted Simons: The Arizona commerce authority is charged with recruiting, creating, and growing business. But how does the commerce authority drive jobs and business to Arizona, and how successful have those efforts been? Joining me to talk about recent business developments in the state is Greg Linaman, chief operating officer for the Arizona commerce authority. Good to have you here. Thanks for joining us.

Greg Linaman: Thank you, Ted. Great to be here.

Ted Simons: What exactly is the Arizona -- We've talked about it quite a bit on the show, but remind us what we're talking about.

Greg Linaman: We're created by the legislature and the governor in to drive Arizona's economy forward, particularly by pursuing high-quality jobs.

Ted Simons: Has the ACA evolved since its inception?

Greg Linaman: Absolutely. Our first year was sort of the foundational year, as with any organization, we developed policies and helped acclimate our board, and we got our bearings. So maybe a good part of the first year was about the transition and the foundation, this year it's been full speed ahead. We've been working hard and had a lot of great results.

Ted Simons: Let's talk about how the ACA drives jobs and business to Arizona.

Greg Linaman: Absolutely. We generally speaking -- Pursue three strategies -- Business creation, where we work with companies that are early stage and we help them get a foothold and commercialize. Number two, is business expansion. Which means working with existing Arizona companies of all sizes to help them grow, and number three, business attraction which essentially means recruiting other businesses from out of state and internationally to Arizona.

Ted Simons: Is there a focus on high wage jobs here?

Greg Linaman: Absolutely across the board our focus is always on high-wage jobs.

Ted Simons: Let's talk about some of the expansions here. GoDaddy, 300 jobs. How much was the ACA involved?

Greg Linaman: Extensively. In terms of delivering service and helping with site selection, helping them understand Arizona opportunity, projecting work force opportunities and delivering incentives, the commerce authority was involved from the get-go with go daddy.

Ted Simons: G.M. had expansion here as well, same kind of thing as far as what the commerce authority did and how it was involved?

Greg Linaman: Absolutely. We worked with General Motors for a long period of time. They went through a long internal process, they're a large company, as you understand, so their time line was longer than our other companies. But we advised them all along the way about the vantages of Arizona and we're very excited. Obviously they chose Arizona and Chandler in particular.

Ted Simons: Talk about the dynamics between a G.M. where you may need to remind them what Arizona is about, and a GoDaddy who should know what Arizona is all about.

Greg Linaman: Absolutely. That gets right to the difference between the attraction and the expansion strategy. The attraction is all about educating folks about Arizona in terms of what Arizona offers their business, as well as helping them understand the specific incentives and other programs we can deliver to help them -- Help their company take root.

Ted Simons: With these expansions -- Would these have not happened if ACA did not exist? Talk to us -- We've had critics on the program saying the commerce authority, nice idea, but the marketplace, this happened anyway.

Greg Linaman: Sure. Two responses. Number one, every state in the nation is doing what we're doing. So if we decide not to do it, we're at a huge advice advantage because all the other states are out there competing for these opportunities. Number two, we talk to these companies and we ask them, are we delivering value? And we hear in every case that absolutely they are making decisions on the basis of what we're telling them and the sevens the state is delivering.

Ted Simons: How do you make sure you don't deliver too much value? How do you make sure the Arizona's residents get what sometimes they're paying for?

Greg Linaman: Absolutely. Well, we have a very sophisticated valuation process for our discretionary programs, in terms of comparing the return to the state in terms of tax revenue versus the incentives they might receive. A lot of that analysis is done very capably and astutely by the legislature when they develop the programs in the first place.

Ted Simons: Are there algorithms, ways to look at these metrics and say, Ted's Hamburger Hamlet wants a little too much, is there -- As far as our equations go, how do you make sure you don't give up too much?

Greg Linaman: Absolutely. I don't know if they constitute algorithms, but there are two things you can do, industry accepted standards, one is REMY and the other is implan, and these are models developed by economists. You can plug project parameters into those models and they can give you information, and most pertly, state tax revenue that can be projected because you're able to compare the state tax revenue projections to the incentive.

Ted Simons: How much does -- Do federal grants, I know there's a manufacturing aspect with the ACA does and the federal grant is involved there, how much federal money is flowing through this project?

Greg Linaman: Through the manufacturing extension program in particular, it's a $5 million grant, $1 million per year for five years, extremely excited about it, it's a new program to help Arizona small and mid-size manufacturers. We're going to be able to deploy our resources, combine with federal resources to help small and mid-size manufacturers compete globally by helping them do what they already do better.

Ted Simons: I know the U.S. small business administration has a grant as well as part of what the ACA do.

Greg Linaman: Absolutely. Another small business targeted program, it's a loan participation program where we're able to provide loans in conscious with private equity funding in small businesses or private financing small businesses. Obviously leveraging existing financing opportunities.

Ted Simons: A couple of questions. Again, from folks we've had on the program who aren't enamored with the ACA they say the commerce authority essentially by offering incentives or focusing assistance is picking favorites. How do you respond to that?

Greg Linaman: I can tell you when it comes to trying to help facilitate high quality job creation, we're equal opportunity across the board, we will try to provide our assistance, whether it's financial or services in kind to any kind of employer that's helping create high-quality jobs from. That the wonderful thing about high quality jobs is that again, this gets back to the modeling we're talking about, the multiplier effect of the high quality jobs in terms of the indirect jobs they create and the economic activity they create and the tax revenue they create, they help create all the other kinding of jobs we might not be able to, because of limited staff and resources help as often.

Ted Simons: Back to Ted's Hamburger Hamlet.How do you explain to the small business guy orthopedic person who's been here for a while and struggling, they're seeing incentives, they're seeing assistance, how do you explain this is fair and up and up?

Greg Linaman: Absolutely. The first thing I point out is that the Arizona legislature is mindful of the Hamburger shack. For example, the Arizona legislature has reduced corporate tax rates some % over a five-year time line. So absolutely small businesses are targeted as well, but the other thing is that when we go out and attract high-quality jobs, the bigger employees, they're eating at the Hamburger shack. We think everyone benefits from the high quality jobs.

Ted Simons: When critics say too much government interference from the Commerce Authority, you say --

Greg Linaman: We are a public-private partnership in nature. Our board consists of private sector CEOs, we are engaged with the business community, we are not strictly a government entity. We are to help connect the dots of the economy so everyone benefits.

Ted Simons: I gotta ask about State Farm and Tempe. That is a humongous project. How much was ACA involved?

Greg Linaman Very involved, from very early on. Very exciting project. Largest office development in the history of Arizona.

Ted Simons: All right. We'll keep an eye on that one. Good to have you here.

Greg Linaman: Thanks for having me.

West Phoenix Revitalization

A new report is out on improvements made in West Phoenix. The West Phoenix Revitalization Area 2012 Annual Report shows a reduction in property and violent crimes and a $12-million investment in foreclosed properties. Ginger Spencer, Special Assistant to the Phoenix City Manager and Jim Miller, WPRA Board Chair, will talk about the report.

Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. State lawmakers revived a number of controversial election law changes today. The changes include dropping voters from early voting lists if they fail to vote by mail in consecutive elections. Other provisions involved tightening the petition gathering process for citizen initiatives and putting limits on those who return another voters' ballot to the polls. The changes were all bundled into one bill that was forwarded for a final vote after a brief meeting. Critics say the changes restrict voting right? The west Phoenix revitalization area annual report is out and shows encouraging results on efforts time prove west Phoenix. Ginger Spencer, Special Assistant to the Phoenix City Manager, is here to talk about the report, as is Jim Miller, chair of the west Phoenix revitalization area board. Good to have you both here. Thanks for joining us. Give me a better definition, what is the west Phoenix revitalization area?

Ginger Spencer: The west Phoenix revitalization area is basically a 52-square-mile area in west Phoenix, it spans from Van Burien on the southern end to Dunlap, Camelback to the north and from 19th Avenue all the way out to the Loop 101. So basically that's the area that we're talking about for west Phoenix revitalization.

Ted Simons: And the west Phoenix revitalization area, is it a group, an organization? How is it constructed?

Ginger Spencer: It's the west Phoenix revitalization advisory board, and it was appointed by the mayor and council back in 2006. And Jim Miller is our current chairman.

Ted Simons: So let's talk to Jim. How does the community advisory board work? What's involved?

Jim Miller: It's made up of about 16 citizens, they live or work in the west Phoenix area, we got a diverse group, from neighborhood activists, block watch leaders, to business people like myself, to people from nonprofit, and they're all volunteers. I'm proud to say that of the original board members from eight years ago are still serving on that board.

Ted Simons: Started eight years ago?

Jim Miller: Eight years ago in January.

Ted Simons: Was there anything in particular that got this started? Or was it just time?

Jim Miller: No, there was a $50 million -– The 2006 bond program, which was over $700 million, $50 million was allocated for the revitalization of west Phoenix. So this board was put together to make recommendations and kind of oversee the spending of that $50 million in the revitalization efforts.

Ted Simons: Was the $50 million meant to be spent during a certain time frame?

Jim Miller: Originally it was supposed to be spent in six to seven years, but because of the economy and the ability for the city of Phoenix to issue bonds, it's going to stretch out to probably a 10- to 14-year project.

Ted Simons: OK. Let's talk about this report now. What did the report look at, what did it find?

Ginger Spencer: It's an annual report, and we had great -- Significant achievements and accomplishments we wanted to share with the community. So what we found is that crime continues to decline, property crime standpoint, it's down 33%. From a violent crime standpoint, it's down 14%. We also were able to open up a new senior center, the Helen Drake Senior Center off th Avenue and northern, to help our seniors, and it's a green building, award-winning building. We were able to also train over 500 people to get them ready, job readiness, and we worked -- We had over 500,000 visitors to the libraries in the area. So we had a lot of significant achievements, and we just wanted to share that information with the community.

Jim Miller: I think it's a combination of a very fine police department in the west Phoenix area, along with the citizens groups. We have a ton of block watches out there. We're very good at cleaning up graffiti. We've done tons of work on graffiti. So we clean up the area, we make citizens more proud of the area, therefore they're more invested in the area and they're invested in keeping crime down. So with the cooperation of the police department and the citizens, it's helped to reduce that.

Ted Simons: Were there particular projects involved that happened as a result of the revitalization area?

Ginger Spencer: Yes. There was one -- There were several projects there. Was one project that was in partnership with Grand Canyon University, and they worked very closely with our police department, with our Maryville, Estrella, Cactus Park precincts. What they were able to do is focus on trying to clean up prostitution in the area, they also worked with students and looking at their after-school activities and making sure they're not doing things they're not supposed to. So really working closely with the youth in that area, and also looking at panhandling. One of the other things that Grand Canyon University did was they actually donated over 10 bikes to the police department to help out with the bike patrol in the area. And they used those bikes to help with the after-school efforts for Alhambra High School.

Ted Simons: Were these the kinds of things the board or the group, the organization looks at and says, here's an area around camelback, or here's an area out here in Maryvale, how do you send out priorities here?

Jim Miller: That's exactly right. Everybody lives, works in the west Phoenix area, so they know boots on the ground so to speak, they know what's going on in their neighborhoods. They know what their needs are. We've done a lot in the area of safe trips for students to the schools, where sidewalks haven't been available to students, we've made sidewalks available. So there's been a ton of things that has come up out of the community that we were able to implement with the bond dollars.

Ted Simons: There's a neighborhood revitalization program, stabilization I should say, program as well, going into foreclose, $12 million invested into foreclosed properties. Talk to us about that.

Ginger Spencer: The neighborhood stabilization program, with the $ million that was invested in the community, we were able to acquire foreclosed homes. We were able to rehabilitate and sell of those homes, and we were able to sell an additional foreclosed homes with additional homeowner assistance -- Homeownership Assistance Program funds.

Ted Simons: This money again comes from the bond money?

Ginger Spencer: Right. So there's several different funding sources that we use to invest in the west Phoenix revitalization area. So it's 2006 bond funds, we also use the neighborhood stabilization funds, which is federal funds, we use community development block grant funds, and the list goes on. We even use Parks and Preserves initiatives to help with some of the improvements to the parks in the area.

Ted Simons: How bad did the crisis -- Housing crisis hit west Phoenix.

Jim Miller: Probably as bad as any other area. I think it's coming back a lot faster. I might add what Ginger said as far as the collaboration, we've reached out to the business community, mainly retail, shopping centers, small shopping centers, big shopping centers to help revitalization their shopping centers to make sure they're in concert with what we're trying to do with inside our communities.

Ted Simons: The neighborhood stabilization program, I looked at foreclosed properties, I assumed they were all residential. Were they not -- Were there some commercial properties.

Jim Miller: There were some commercial properties, but obviously the majority was residential. But it was a great collaboration, when we can go into businesses and say, we're improving 67th Avenue, we're putting in streetscaping, and we're doing landscaping improvements. You now need to clean up your property, and we've had very good response from the business community.

Ted Simons: I also notice as well that Maryvale golf course was saved, and this was considered a successful effort as far as a revitalization area was concerned. Why was that such a big deal?

Ginger Spencer: Basically over the last year through our innovation and efficiency efforts, one of the areas we looked as was the golf course and the revenues they were bringing in. In are challenges there, and so the parks department working with the city office, the mayor, they put together a task force to make recommendationing as to which golf courses should remain open or closed. The Maryvale community spoke loud and clear and said do not shut down our golf course. And Mr. Miller was very influential in that process.

Ted Simons: Why were you so influential? The golf course has a badge for the community, doesn't it? It's an identity for an area.

Jim Miller: Definitely. I work for John F. Long and he build that course some years ago. And it's always been a key to the community where affordable golf hasn't been made available to west Phoenix prior to the building of that golf course. It's in the center of the revitalization area, it's a great area, so other than golfing there's jogging and all sorts of activities going on there. So to take a jewel away from that community was not necessary, and we fought hard for it and we're happy the city council saw the wisdom in keeping it open.

Ted Simons: I'm happy too. I play the course a couple times and it's a nice course.

Jim Miller: Yes, it is.

Ted Simons: Biggest challenge for west Phoenix? What do you see looking forward?

Ginger Spencer: For us, we want to continue to work with the community, to work with the advisory board, with the businesses, with the schools, so we can continue to reduce crime in the area, that we can continue to have economic development in the area, so we've made a lot of progress over the years, but there's still a lot of work to be done. So for us from the city side, we just want to continue with our efforts.

Ted Simons: As far as the board is concerned, what are the biggest challenges, how do you keep this momentum going?

Jim Miller: Like any project that goes over years and years and years, it's hard to keep everybody's enthusiasm up. But it was a big challenge to start with, and we still have a lot of goals yet to meet. So I think we are totally invested in continuing the bond program, finishing it out, hopefully there will be additional bond money in the future. When you talk about revitalization of a community that's well over 50 years old, you just don't do it overnight. And if you don't continue to improve upon the revitalization, then you take a step backwards, and we don't want to see that. So I think our hearts and souls are in keeping the program moving forward, well after the 2006 bond money runs out.

Ted Simons: The real quickly, are you seeing that commitment from citizens, are they starting to figure this out?

Jim Miller: Oh, yes, definitely. And we are recruiting more people into the movement. So it's gratifying. I want to compliment the city staff, they've gone over and above their normal day's work to help support the revitalization effort. They just have been key to all of this.

Ted Simons: Last question for you, is the city going to continue this kind -- It's one thing to say let's get the push, what's happening here?

Ginger Spencer: Definitely. We are committed. Our council members have spoken loudly, we've got this area is represented by four different councilmembers, and then our city manager, mayor, we are totally committed.